ICPEI Holdings Inc. Reports Second Quarter 2022 Results
InvestorSarfari Comments:
Here’s another quarter of growth - 72% increase vs same time last year. The market is shifting as we stated in our last commentary on ICPH. In our opinion, this should continue as money flows from money-losing companies into profit-making ones.
ICPH is under the radar. The liquidity in the stock is on the low side, but we’re watching as each quarter goes by and revenue increases. There will be a time when a larger Insurance Firm will pounce on ICPH. As Warren Buffet once stated, “The stock market is a device for transferring money from the impatient to the patient.” We’re patient and enjoying every quarter results.
ICPEI Holdings Inc. Reports Second Quarter 2022 Results
Toronto, August 17, 2022 – ICPEI Holdings Inc. (the “Company”) (TSXV: ICPH) which operates in the property and casualty insurance industry in Canada, today reported net income of $0.9 million for the quarter ended June 30, 2022.
Serge Lavoie, Chief Executive Officer, commented “We are executing on our growth strategy and continue our impressive growth this quarter with premiums increasing by 72% during the quarter compared to the same period last year and a combined ratio of 93.8% for Q2 2022.”
Highlights
Premiums written of $31.2 million in this quarter represent a 72% growth over the same period in 2021. Personal Lines increased by 45% and Commercial Lines increased by 106% in this period when compared to the same period last year.
ICPEI was granted a license to write commercial business in Alberta in April 2022.
The business mix at the end of the second quarter of 2022 is Commercial Lines of 53% and Personal Lines 47% compared to Commercial Lines of 46% and Personal Lines 54% in the same period last year. The growth is in line with our strategy to expand geographically in Quebec and Ontario and the commercial line of business.
A Combined ratio of 93.8% resulting in an underwriting income of $1.2 million. The higher combined ratio compared to 81.2% in the same period last year was the result of higher claim frequency in the personal line.
Investment income recorded a loss of $0.2 million in the quarter compared to an income of $0.6 million in the same period last year. Majority of our investment is in fixed income and is marked to market. With rapidly rising interest rate, valuation dropped. On the positive side, the expected yield in our investment portfolio has increased from 3.15% to 4.04% in the quarter.
The book value per share was increased by $0.06 to $1.94 from EPS in the quarter. Due to rapidly increasing interest rate environment, market value of our investment decreased and we recorded unrealized losses in Other Comprehensive Income that decreased the book value per share by $0.06. As a result, closing book value per share of $1.88 remained the same at end of last quarter.
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3 months ended June 30 |
6 months ended June 30 |
||||
|
($ THOUSANDS except per share amounts) |
2022 |
2021 |
2022 |
2021 |
|
|
Direct written and assumed premiums |
31,222 |
18,127 |
48,689 |
29,501 |
|
|
Net earned premiums |
18,955 |
12,892 |
34,984 |
23,595 |
|
|
Net claims incurred |
9,928 |
5,457 |
17,640 |
10,861 |
|
|
Net acquisition costs |
5,472 |
3,171 |
9,755 |
5,751 |
|
|
Operating expenses(1) |
2,381 |
1,843 |
4,552 |
3,529 |
|
|
Corporate expense(1) |
274 |
158 |
635 |
394 |
|
|
Underwriting income (2) |
1,174 |
2,421 |
3,037 |
3,454 |
|
|
Investment income |
(188) |
556 |
35 |
1,230 |
|
|
Impact of change in discount rate on claims |
520 |
(5) |
1,102 |
(10) |
|
|
Net income before income taxes |
1,232 |
2,814 |
3,539 |
4,280 |
|
|
Income tax expense |
322 |
778 |
979 |
1,155 |
|
|
Net income |
910 |
2,036 |
2,560 |
3,125 |
|
|
Net income attributed to: |
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|
Shareholders of the Company |
910 |
2,036 |
2,560 |
2,809 |
|
|
Non-controlling interest |
– |
– |
– |
316 |
|
|
Earnings per share (EPS) – Basic and Diluted |
$0.06 |
$0.14 |
$0.17 |
$0.21 |
|
|
Book value per share (BVPS)(3) |
$1.88 |
$1.63 |
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|
Return on Equity (ROE)(4) |
23.2% |
10.5% |
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Sum of Operating expenses and Corporate expense equal Operating Costs on Consolidated Statements of Income and Comprehensive Income.
Underwriting income is defined as net earned premiums less net claims incurred, net acquisition costs, operating expenses, and excludes any impact of change in discount rate on claims and corporate expenses.
Book value per share is calculated by dividing shareholder’s equity by the number of common shares outstanding.
Return on Equity is twelve months rolling net income attributable to shareholders on continued operations divided by average shareholder’s equity.
Underwriting Results:
|
3 months ended June 30 |
6 months ended June 30 |
|||
|
Underwriting Income (loss) $000s |
2022 |
2021 |
2022 |
2021 |
|
Personal Lines |
191 |
911 |
523 |
1,119 |
|
Commercial Lines |
983 |
1,510 |
2,514 |
2,335 |
|
Key Ratios |
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|
Loss Ratio |
52.4% |
42.3% |
50.4% |
46.0% |
|
Expense Ratio |
41.4% |
38.9% |
40.9% |
39.3% |
|
Combined Ratio |
93.8% |
81.2% |
91.3% |
85.3% |
|
Loss Ratios |
||||
|
Personal Lines |
62.3% |
42.7% |
59.7% |
49.6% |
|
Commercial Lines |
42.2% |
41.8% |
40.4% |
40.8% |
Capital Management
The Minimum Capital Test (“MCT”) ratio of ICPH’s subsidiary, The Insurance Company of Prince Edward Island (ICPEI) as at June 30, 2022 was 296%, which comfortably exceeds the supervisory target of 150%.
COVID-19 Pandemic Update
Currently, COVID-19 did not have any significant impact on the premiums, collections, investments or other operational activities of the Company, but the impact remains uncertain as the pandemic continues to evolve.
For more information, please visit www.icpeiholdings.ca Investor Relations, 905-602-2150, ir@icpeiholdings.ca